Passive income is money that comes flowing to you without you having to put too much labor into it. There are hundreds of ways to create passive income, some more simple than others. No matter what type of passive income you determine is right for you, it will always come with an initial investment of time or money. Remember that you need to have patience if you are using stocks, real estate, or a new business as a passive income stream, the money isn’t going to come rolling in overnight.
How I Plan To Do It
For example, I have set up my financial blog, Financial Money Tips, to be a passive income asset. This has taken time to develop. What was once a solo operation, where I did most, if not all, of the work has grown into a business where I am managing more rather than putting forth effort to work. In fact, I plan to even increase the productivity of this passive income stream by hiring staff writers, SEO experts, and social media managers, to help me deal with the day to day flux of work. Ultimately, meaning this site will truly become an asset once my income exceeds my expenses.
Preparation
First and foremost, what is important with passive income is the necessity to have the knowledge on the asset you are willing to invest into; nothing will work for you without investing to increase your financial knowledge. For me, creating a website that dealt with my passion for finance and making money was the way to go, but that isn’t going to work for everyone and there are more ways to create passive income than to start a blog.
How do you feel about stocks, new business ventures, or even real estate? These are some of the passive income possibilities that can bring you the most return, but you don’t want to jump in if you don’t know anything about the industry.
Real Estate
This is one of the primary sources of passive income that people tend to think about. In most cases the homeowner rents out their home and the rental money that comes in is passive income. Of course, there are duties that go into being a landlord. If repairs are needed you are the one responsible to keep your tenants happy. If your tenant moves out, you have to find new tenants, but there are also ways to be a hands off landlord. By using a rental property company you can pay someone a percentage of your passive income to take care of the rental property, and the tenants. Then all you have to do is sit back and let the money roll in.
Stocks
More volatile than real estate, stocks can be a passive income stream if you are smart. You can’t randomly pick a stock though, and hope for the best. In order for stocks to be a passive income stream they need to actually earn you money. To use stocks for passive income you have to be willing to invest not only the initial money, but time as well. Research the stocks you are considering and put in some time to insure that you are getting the best return on your investment.
Hiring a personal stock broker will truly make stocks a passive income asset for you. Even though they need to take their cut of the profits, this will save you time and will also help you to build a business relationship with a professional and learn from their expertise.
Internet Business Content
The internet gives you hundreds of passive income potential options. My blog is a great example of that. If you want to create a blog or other web contact to earn you passive income, pick a topic that you love or have expertise around. By sharing your passion and knowledge you can start to earn money. With a blog it takes time to build up the income stream to really make it passive, but overtime this is one of the easiest ways to make money online.
I’m a big fan of the financial education advocate Robert Kiyosaki. I know many of you have read his Rich Dad, Poor Dad series. He teaches to create passive income and invest those earnings into paper and liquid assets. To get the most out of your money, I strongly encourage others to thrive on doing this same strategy. It doesn’t hurt to start a side project and turn it into a passive income stream. I don’t know about you, but it’s easier to invest my passive income I’ve created than the income I’ve earned from my job.
I’m not certain the income from a website is ever completely passive. At the very least you need to manage the content writers, SEO folks and advertising. I do however believe it is a good way to finance other sources of passive income such as the dividend stocks and real estate that you’ve mentioned.
Hey Money Infant, Thanks for stopping by and expressing your thoughts! I agree that most website owners do not make passive income from their online assets. However, I do believe managing and working are a lot different in my opinion. Even if I felt like managing was too much work for me, hiring a CEO and offering a certain percentage of the company is something to be considered. I would rather make a little less money now and have it all be passive income, to give me more free time to focus on building my net worth.
Blogging is more like residual income. You create the content and continue to collect the checks. Like any other type of author, you have to promote yourself or the income dries up.
Real estate CAN be passive but personally, I think it’s more like a small business.
All of these are fine examples of side income!
I think calling blogging residual income is a fair assessment. However, as I said in my article though, nothing will come to you without putting forth effort to learn about the asset you are creating. Therefore, no income is truly passive. It takes your time and effort as well as money to create “passive income.”
Here is a good article on blogging for passive income:
http://geniustypes.com/is_blogging_income_passive_income/#